Question #3: Suppose that the dailydemand and supply curves for cups ofretail coffee in Madison are QD=65, 000-10, 000PQS= -35,000 + 15, 000P A. Solve for theequilibrium price and quantity. B. Plotthe supply and demand curve (note thatquantities are in units of 1,000) C. Usethe supply and demand curves tocalculate consumer, producer, and totalsurplus. D. When the state legislature isin session, hundreds of capital workerscome into town. The new demand curveis QD 85,000 - 10, 000P Plot the newdemand curve on the figure on theprevious page E. If prices can adjustduring this period, what is the newequilibrium price and quantity? F. Ifprices cannot adjust, what is the quantityprovided at the old equilibrium price?What is the excess demand?$8$7$6$5$4$3$2$1

Answered: Image /qna-images/answer/8b8408a8-063f-4850-8268-675e0d54c450.jpg

Answered: Question #3: Suppose that the daily…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose that the price of materials used to produce computer hardware, such as graphics cards, is decreased. Show what occurs to price, quantity, consumer surplus, producer surplus, and total surplus in the market for computers graphic cards using a supply-and-demand diagram (draw a graph). Furthermore, provide five explanations for what occurred.
In the short run, what happens to the competitive market price of gasoline when a state's demand curve shifts to the right during warm months? In your answer, distinguish between areas in which regular gasoline is sold and jurisdictions that require special blends. Show the effect of a shift of the demand curve in areas that use regular gasoline. 1.) Use the line drawing tool to draw a new demand curve for regular gasoline. Label this line 2.) Use the point drawing tool to identify the new market equilibrium. Label this point 'E₂'. Carefully follow the instructions above, and only draw the required objects. Show the effect of both a small and a large shift of the demand curve in a jurisdiction that uses a special blend. 1.) Use the line drawing tool to draw a new demand curve for special-blend gasoline for a small increase in demand such that the equilibrium price does not change. Label this line 'D³. 2.) Use the point drawing tool to identify the corresponding market equilibrium for a…
Consumer surplus is a measure of the difference between: a) The price which a consumer has to pay and the cost of producing the good (in a diagram, the area between the market price, and the supply curve). b) The consumer’s willingness to pay, and the cost of production (the area between the demand curve and the supply curve). c) The value which a consumer places on a unit of the good, and the market price (the area between the demand curve and the market price line). d) The marginal revenue from sales and the marginal cost of sales (the area between the marginal revenue and the marginal cost curves).
III. Market Equilibrium 1. Complete the sentence: The market is in equilibrium when The demand function is Q = 5000 – 10p, and the supply function is Q = 200 + 6p. 2. Determine the equilibrium price and quantity.
Solve B,D and E subparts Q)The market supply curve is given by P = 2Q and the market demand curve is given by P = 42 Calculate the equilibrium quantity and price. B) Show the demand curve, the supply curve, and equilibrium quantity and price on the graph. C) In equilibrium, what is the total revenue from sales? (Hint: total revenue equals quantity multiplied by price. D) How many units will be traded at a price of $35? Explain briefly. E) How many units will be traded at a price of $14? Explain.
Think about all the goods and services that you consume. Which product gives you the highest consumer surplus? Discuss in detail using the equation of consumer surplus
14. Over the past few year’s consumer tastes and the number of buyers in the market for a game called ‘pickle ball’ have increased dramatically. Thus, the demand for tickets to pickle ball events has increased. Before this all started the equilibrium price of a ticket to a pickle ball event was negative. This means that: A few years ago, there would have been a surplus of tickets even at a price of zero, now the invisible hand has pushed prices to greater than zero. A few years ago, the quantity of tickets demanded was less than quantity supplied. Pickle ball event tickets resembled the market for recyclable cardboard a few years ago Greater demand for pickle ball tournament tickets will lead to a greater demand – and higher pay – for professional pickle ball players. All of the above. B and D only
1. Briefly describe 5 things that a firm could do that would reduce the price sensitivity of buyers 2. Briefly explain five reasons why firms may choose prices that are below their profit-maximizingprice 3. List 5 things that could increase demand and 5 things that could increase supply for a typical(normal) good (hint: be specific on the direction of change for each event) 4. Describe 5 consumer decision biases 5. Describe 5 costs from international trade 6. Briefly describe 2 or 3 things that could shift labor demand and 2 or 3 things that could shift laborsupply 7. Explain the implications from the short-run and long-run Phillips curve 8. Briefly describe 5 things that could cause the US dollar to appreciate in value 9. List 5 things that could decrease aggregate demand and 5 things that could decrease the short-runaggregate supply for an economy (hint: be specific on the direction of change for each event) 10. Describe the fiscal and monetary options that could be used to reduce…
2. A market is modeled by the following demand and supply functions: Qd = 60 – 10P and Qs = 10P. If P=$5, determine if there is an equilibrium, excess supply (surplus), or excess demand (shortage). Answers are in numbers. A. 0 (Equilibrium) B. 20 (Surplus) C. 40 (Surplus) D. 20 (shortage)
1. Consider the market for cell phones in Celltown. Suppose that the inverse demand curve is P = -2Qd + 300 and that the inverse supply curve is P = 3Qs + 50. a. Sketch the inverse supply and inverse demand curves. b. Calculate the equilibrium price and quantity. c. Compute consumer surplus (CS), producer surplus (PS), and total surplus. d. Suppose the Mayor of Celltown institutes a price floor of P = $250 in order to promote the new technology. It is illegal to sell cell phones at a price below P. What is the quantity transacted in the market with the price floor? e. Compute the change in CS and the change in PS. f. Compute the change in total surplus. If you were an economic advisor to the Mayor whose goal is to maximize the total surplus of the city, would you advise continuing the policy or not? Explain. g. A representative of the Association of Cell Phone Manufacturers arrives at the Mayor's office to lobby against eliminating the price floor. i. Explain why economic theory…
5. The demand and supply functions of a computer accessory are D(x) = 4.5 - 2.5x and S(x) 0.0375 +0.125x, respectively. What is the market equilibrium quantity and price? =
8. Total economic surplus The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. (?) PRICE (Dollars per headset) 350 315 280 245 210 175 140 105 70 35 0 Demand 0 Supply 40 4 80 120 160 200 240 280 320 360 QUANTITY (Millions of headsets) Total surplus in this market is $ 400 million. Equilibrium A Consumer Surplus ◇ Producer Surplus

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS